Daniel Batten is a climate tech investor, author, analyst, and environmental activist who previously founded and ran his own tech company.
Why a climate tech investor got excited about garbage gases
Since 2013, climate tech has grown at an equally astonishing rate as bitcoin itself: up 210% last year and 20,933% since 2013. In fact, climate tech is now worth 14 cents of every dollar of venture capital invested.
Today, the two worlds are merging as Bitcoin mining emerges not only as the way to secure the future global financial system, but also as one of the most significant climate technology propositions in the world. In terms of being able to solve our most pressing emissions problems at scale today, it is, incredibly, the the best-positioned climate technology solution.
A bit of background: climate tech is the fastest growing area of venture capital for a reason. In the tech industry, you are commercially rewarded for solving the biggest problems. The prevalence of climate technology suggests that collectively, humanity may have finally realized that our real problems are not a lack of retina display devices, but the lack of a clear path to a safe environment.
Climate tech companies look a bit like Maslow’s hierarchy of needs: some focus on the most urgent and pressing issues (similar to “food, water and shelter”) in the hierarchy of needs. Maslow. Others are more about shades higher up the pyramid.
When I explain Maslow’s hierarchy to people, I often say “If you don’t know where your next meal is coming from, self-actualization is unlikely to be your top priority.”
About a year ago, I realized that unless we have our “survival technology” sorted, the upper layers of climate technology will arrive too late to help us.
Based on the fact that a technology ready today has a more immediate impact than one ready a decade from now, and the fact that methane emissions are 84 times more powerful than carbon dioxide emissions, we can get an idea of what Maslow’s pyramid for climate technology looks like. .
Layer 4 climate technology: impact of local emissions; a project to clean up local rivers.
Layer 3 climate technology: capable of reducing carbon emissions on a global scale.
Layer 2 climate technology: capable of reducing methane emissions on a global scale.
Layer 1 climate technology: technologies that reduce methane emissions on a global scale and are ready today.
Most investors cannot be counted on to invest in the most important areas of climate technology.
For example, the PwC State of ClimateTech 2021 report found that of the 15 technology areas analyzed, the top five that account for more than 80% of future emissions reduction potential by 2050 received only 25% of recent investment. in climate technologies.
That report itself made no mention of methane, although since UNEP’s statement that “reducing methane is the most powerful lever we have to slow climate change over the next 25 years” I would be surprised if this isn’t a new area of focus in 2022.
So, to put it simply: to fight climate change, we need to work on all four layers simultaneously.
Layer 3 companies include two very promising companies in which we have recently invested: Hot Lime Labs, which decarbonizes the world’s greenhouses, and Zincovery, which decarbonizes the global zinc recycling process.
Examples of Layer 2 companies include BlueMethane, which has promising technology that could one day remove 1 billion tonnes of methane from hydroelectric dams, rice paddies and sewage around the world. Another example is Cetogenix, which can improve the efficiency with which methane is extracted.
These four examples can have a significant overall impact on emissions. Likewise, all four will need a few more years to reach the scale necessary to realize this potential impact.
Just like Maslow’s hierarchy – unless we can use technologies that are ready today to reduce methane emissions on a global scale: the sobering reality is that these other promising technologies will be ready too late. , because we will have already shifted beyond 1.5°C of the global temperature. warming up.
About a year ago, I realized that all of the projects we had invested in were Layer 3 technologies. We weren’t doing anything to reduce methane emissions, which was a more immediate issue. Second, we weren’t doing anything to invest in technologies that are ready to run at scale today.
The more I studied methane emissions, the more I realized that we didn’t have time to wait for technologies that were ready to evolve in eight years. We must also make progress on the technologies that are ready today; these are our Tier 1 projects, or what I call “survival technology”.
Our biggest emitters of methane are animal agriculture, oil and gas reserves, and landfills. I believe the best way to reduce animal agriculture involves behavioral change in our eating habits – less meat and dairy in our diets. No fancy technology is needed there. However, the other two cannot be resolved by behavior change. Landfills created in the 1970s, for example, still emit methane today, and will continue for years to come regardless of our current behaviors.
Of the more than 300 climate tech ideas I’ve seen over the past decade, the best layer 1 climate tech I’ve seen is also the most low-tech: capturing methane and using it to generate electricity, then use that electricity for location. agnostic customers who don’t need expensive gas pipelines or pylons to deliver that electricity to their doorstep. For the majority of these dumps, the only location-independent client that made economic sense was Bitcoin mining.
It’s a very simple, crude, and devastatingly effective way to solve our most pressing emissions problems.
The added benefit of landfills is that you don’t experience the distraction of people criticizing you for working with oil and gas companies. All profits go to the municipalities, to the community. It therefore immediately ticks the environmental and social boxes.
The uninformed will always retort that “we should be using this methane to power something more useful,” a statement that conveys both “I haven’t considered how useful Bitcoin is to two-thirds of the people living under autocratic or semi-autocratic regimes without strong financial systems”, and “I have not looked at the viability of alternative uses of this energy” at the same time.
The reality is that unless your landfill is in a very large urban center, there is no economical way to use the gas produced: gas pipelines can cost around $5 million per mile to build, and the creating a power plant makes sense only on a large scale. For three-quarters of the world’s landfills, the unique, location-independent feature of mobile Bitcoin mining units provides a solution to two-thirds of our world’s most pressing Layer 1 problem (emissions from landfills and fields). oil).
It can evolve quickly and transforms a liability – the cost of inserting and maintaining flares – into an asset for the municipal landfill, and therefore for the whole community.
Currently, Vespane is leading the charge. Due to the times we live in, it’s no exaggeration to say that this makes them one of the most important Layer 1 climate technology companies in the world, and therefore one of the most important companies in the world of our time.
This is a guest post by Daniel Batten. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.